Cigna expects very attractive growth in the Medicare Advantage space, the company said during its earnings call on Thursday.
The company reported income in the third quarter of $ 945 million, compared to $ 716 million during the same period in 2017. Income for the year is projected to grow by 31 to 33 percent, to at least $ 3.49 billion in 2018.
The Medicare Advantage plan Cigna-HealthSpring was recently recognized as being among the top three out of ten competitors in the latest J.D. Power customer satisfaction rankings.
Cigna also achieved strong star ratings. Its overall corporate rating is 4.5 stars for 2020, with 76 percent of its Medicare Advantage customers in plans of 4 star or higher in 2020, said President and CEO David Cordani.
WHY THIS MATTERS
Cigna, and other insurers, are seeing strong growth in their MA business.
Cigna said that its government business for third quarter 2018 reflects strong execution in Medicare Advantage.
WHAT ELSE YOU NEED TO KNOW
Cigna revenues increased by 9 percent, led by growth in the company’s global healthcare and supplemental benefits segments.
Its customer base at the end of third quarter totaled 16.3 million, an increase of 363,000 customers year-to-date.
Cigna’s corporate venture fund, Cigna Ventures, fueled the Cigna Diabetes Prevention Program, in collaboration with Omada Health. The program delivers personalized digital health tools to help prevent the onset of diabetes, as well as other chronic conditions.
Participants in Cigna and Omada pilot programs have achieved improved health, quality-of-life and affordability in part by reaching their weight management targets, Cigna said. As a result, employers realized both improved affordability and co-worker productivity.
In September, Cigna secured permanent financing for the merger and also received Department of Justice clearance. The closing awaits approval at the state level. Cigna has gotten 23 approvals with six approvals remaining.
As the company steps into 2019, there were headwinds, Cordani said, such as margins in the individual business more in line with long-term expectations.
But the headwinds will be offset by a number of tailwinds, such as continued growth in the customer base including Medicare Advantage, further expansion of relationships through its specialty products and continued growth in the international and group disability life business, Cordani said.
ON THE RECORD
“Cigna continues to provide more affordable, personalized solutions for our customers and clients, enabling us to deliver strong results,” Cordani said. “Looking ahead to 2019, we expect to continue driving innovation, growth and value, all of which will be further enhanced through our pending combination with Express Scripts.”
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